So­cial en­ter­prises have been gain­ing pop­u­lar­ity in re­cent years. CHERYL LEONG talks to suc­cess­ful en­trepreneurs about their labour of love and finds out how you can
join the move­ment.

What to con­sider if you’re in­ter­ested in set­ting up a for­profit busi­ness with a cause.

Any­one can set up a busi­ness, but if you want to do more for a cause that’s close to your heart, start a so­cial en­ter­prise. Th­ese busi­nesses are still for-profit, but they have a so­cial mis­sion at their core, so you’re do­ing some­thing good for so­ci­ety and earn­ing a liv­ing too.

So­cial en­ter­prises are steadily gain­ing pop­u­lar­ity, says Leona Leong, founder of Aii Sin­ga­pore, a cus­tom-gift com­pany that em­ploys the less-priv­i­leged. “Com­pared with when I started in 2011, there is more aware­ness for so­cial en­ter­prises now. Peo­ple want to be part of this grow­ing move­ment – I’m see­ing more com­pa­nies sup­port­ing us.”

Even new­bie Kerb­side Gourmet, a mo­bile food truck

with a “buy-one-give-one” model to help un­der­priv­i­leged stu­dents, is re­port­ing gen­er­ous sup­port. Founder Luan Ee says: “We get calls from com­mer­cial com­pa­nies say­ing they want to work with us as part of their cor­po­rate so­cial re­spon­si­bil­ity (CSR) ef­forts. We do events with them, where they en­cour­age their em­ploy­ees to buy food from us, vol­un­teer with us or ‘like’ our Face­book page.”

But don’t con­fuse so­cial en­ter­prises with cor­po­rate CSR, which is a way for profit-mak­ing com­pa­nies to give back to so­ci­ety.

“Com­pa­nies may cut back on CSR dur­ing an eco­nomic down­turn. But the heart of a so­cial en­ter­prise is its so­cial mis­sion – with­out it, you wouldn’t have a busi­ness. So even if times are bad, it doesn’t af­fect what we’ve set out to do,” says Luan.

Set­ting up a so­cial en­ter­prise

As with any busi­ness, you need to reg­is­ter your or­gan­i­sa­tion with the Ac­count­ing and Cor­po­rate Reg­u­la­tory Au­thor­ity (ACRA) of Sin­ga­pore. How­ever, ACRA does not have a so­cial en­ter­prise reg­is­trar at present.

“Some of us, my­self in­cluded, reg­is­ter as ‘pri­vate limited’,” says Luan. “But as so­cial en­ter­prises are not a le­galised busi­ness term un­der ACRA yet, most of us reg­is­ter to be cred­ited as a so­cial en­ter­prise, and as a mem­ber with, the So­cial En­ter­prise As­so­ci­a­tion.”

Launched in 2009, the So­cial En­ter­prise (SE) As­so­ci­a­tion aims to pro­mote the spirit of so­cial en­trepreneur­ship in Sin­ga­pore. “We sup­port so­cial busi­nesses by pro­vid­ing a net­work for them to learn from one an­other. At our net­work­ing events, our mem­bers find the peer-shar­ing ex­pe­ri­ences very use­ful,” says Amy Lim, as­sis­tant man­ager of SE As­so­ci­a­tion.

Be­sides reg­is­ter­ing your busi­ness and hav­ing a net­work of re­sources to draw upon, you must de­sign the right busi­ness model. For Kenny, this means in­cor­po­rat­ing his so­cial mis­sion into his HR pol­icy – by cre­at­ing jobs around those he helps. He ex­plains: “At O School, we de­sign jobs for tal­ented but dis­ad­van­taged youths skilled in street dance, by en­gag­ing their in­ter­ests and em­ploy­ing them as in­struc­tors.”

Like­wise for Leona, who re­cruits the less-priv­i­leged so they can earn a liv­ing. Luan, on the other hand, uses her busi­ness earn­ings – whether she makes a profit or not – to sup­port her cause.

Big­ger chal­lenges ahead

The big­gest chal­lenge, says Amy, is re­main­ing sus­tain­able in a highly com­pet­i­tive busi­ness en­vi­ron­ment. “Hav­ing a big heart is not enough. Busi­ness sense is im­por­tant too,” she adds.

Leona ex­plains: “More than other busi­nesses, we need sus­tain­able ways to gen­er­ate prof­its so we can carry out our so­cial mis­sion.”

Some so­cial en­ter­prises team up with com­mer­cial com­pa­nies that have the fi­nan­cial mus­cle to help or spon­sor them.

“I ap­proached or­gan­i­sa­tions to see if I could get spon­sor­ships that would ease my fi­nan­cial bur­dens. Even now, I do a lot of cold call­ing to see if com­mer­cial com­pa­nies would like to sup­port our cause by invit­ing us to stop by to feed their em­ploy­ees,” says Luan.

Lack of sup­port and aware­ness

Many com­mer­cial com­pa­nies still pre­fer to per­form CSR by do­nat­ing to char­i­ties to get tax re­bates in­stead. “Be­cause so­cial en­ter­prises are not char­i­ties, we’re not al­lowed to ac­cept help in the form of di­rect fund­ing or do­na­tions,” says Luan.

So be pre­pared to put in a lot of hard work, says Leona, who did not take a hol­i­day in the first two years af­ter she launched her so­cial en­ter­prise. “It was tough, but it’s not a sac­ri­fice to me be­cause I love what I do and who I’m help­ing.”